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Investors already knew the graphics processing unit (GPU) specialist's headline numbers were going to be very disappointing. That's because on Jan. 28, it ratcheted back its already-weak guidance for the quarter, citing slowing global growth, particularly in China, and other factors.

Shares of NVIDIA closed up 1.8% on Friday. We can probably attribute the slight gain to the fact that much bad news was already priced into the stock -- shares plunged nearly 14% on Jan. 28 after the company lowered its outlook -- adjusted EPS came in a bit higher than the company had guided for in its revised outlook, and guidance for fiscal 2020 was probably not as bad as some had feared.

NVIDIA stock is up 17.9% in 2019 through Friday, though shares are down nearly 35% over the last year. The S&P 500 has returned 11% and 4.9%, respectively, over these same periods.

For the quarter, GAAP gross margin came in at 54.7%, down from 61.9% in the year-ago quarter. Adjusted gross margin was 56%, down from 62% in the fourth quarter of last fiscal year.

For fiscal 2019, revenue rose 21% year over year to $11.72 billion, GAAP EPS jumped 38% to $6.63, and adjusted EPS increased 35% to $6.64.

For the quarter, NVIDIA has originally guided for revenue or $2.7 billion, plus or minus 2%, but on Jan. 28 axed that back to $2.2 billion, plus or minus 2%. So its revenue result hit the lowered outlook on target. The company doesn't directly provide earnings guidance, but from the expectations it does provide, we could calculate that it was anticipating adjusted EPS to come in at about $0.77. So NVIDIA slightly exceeded its lowered adjusted profit outlook.

Three of NVIDIA's four target platforms -- data center, professional visualization, and auto -- managed to grow on a year-over-year basis, though they all lost ground from last quarter. However, their year-over-year gains were not enough to compensate for gaming's terrible performance since gaming is so large. On the earnings call, CFO Colette Kress explained the three reasons for gaming's poor quarter:

First, post-crypto [post-cryptocurrency bust] inventory of GPUs in the channel caused us to reduce shipments in order to allow access channel inventory to sell through. We expect channel inventories to normalize in Q1, in line with the one-to-two-quarter timeline we had outlined on our previous earnings call. Second, deteriorating macroeconomic conditions, particularly in China, impacted consumer demand for our GPUs.

And third, sales of certain high-end GPUs using our new Turing architecture ... were lower than we expected for the launch of a new architecture. These products deliver a revolutionary leap in performance and innovation with real-time ray tracing and AI [artificial intelligence] [capabilities], but some customers may have delayed their purchase while waiting for lower price points or further demonstration of the RTX technology in actual games.

As to the slowdown in data center -- which had been growing rapidly in recent years -- NVIDIA said on Jan. 28 that a "number of deals in the company's forecast did not close in the last month of the quarter as customers shifted to a more cautious approach." This caution was widespread across verticals and due to concerns about a slowing global economy.

Guidance

For the first quarter of fiscal 2020, NVIDIA guided for revenue of $2.20 billion, plus or minus 2%. At the midpoint, this represents a decline of 31% year over year and is flat with the fourth quarter. For the full fiscal year, the company expects revenue to be "flat or down slightly."

After what happened this quarter with the much-too-rosy initial guidance and the fact that Kress said on the earnings call that the company's "visibility remains low in the current cautious spending environment, and we don't forecast a meaningful recovery in the data center segment until later in the year," investors might not want to place too much confidence in the full-year guidance.

A "turbulent quarter"

In the earnings release, NVIDIA CEO Jensen Huang summed up the quarter by saying that it "was a turbulent close to what had been a great year." Some factors -- such as the deteriorating macroeconomic conditions -- were and are out of the company's control, however, top management made some gaffes that added to the company's woes.

While things could remain somewhat rocky for a while, the long-term picture for NVIDIA is still attractive. As I wrote last quarter:

Nothing has changed with respect to the gaming market's rosy long-term growth projections or NVIDIA's position as the dominant supplier of graphics cards to gamers. Moreover, the company's growth opportunities from AI and driverless vehicles remain powerful.